Goldman Sachs Warns AI Slowdown Could Trigger Stock Market Selloff

What Happened

Goldman Sachs analysts cautioned that if the rapid pace of artificial intelligence investment and adoption falters, it could lead to a sharp selloff in the stock market. According to the firm, a slowdown in AI-driven earnings growth and enthusiasm for leading tech companies could result in the S&P 500 falling by as much as 20 percent. The warning comes amid soaring valuations for companies involved in AI, with investor optimism fueling the market. The announcement reflects growing skepticism about the sustainability of current tech stocks rallying heavily on AI-related prospects.

Why It Matters

This warning highlights the market risks tied to AI as a core growth driver for technology and broader financial markets. A correction linked to AI reliance could impact investment flows, tech innovation, and valuations across multiple sectors. Read more in our AI News Hub